" Berkshire’s Potential Railroad Deal For CSX Appears More Likely
Union Pacific’s blockbuster $85 billion deal to buy Norfolk Southern and create the first transcontinental railroad increases the odds that Burlington Northern Santa Fe railroad, owned by Warren Buffett’s Berkshire Hathaway, will reach a deal with CSX to create a second transcontinental railroad.

Berkshire’s BNSF would benefit from the same advantages Union Pacific and Norfolk Southern highlighted: the ability to ship freight cross-country one to two days faster by bypassing interchanges, making railroads more competitive with trucking. Berkshire could pay cash in the deal with CSX.
J.P. Morgan transportation analysts led by Brian Ossenbeck recently wrote that industry contacts broadly assume that BNSF “could not compete stand-alone if UP/NS merged.” While Union Pacific and BNSF compete in the western U.S., CSX and Norfolk Southern are the two major Eastern railroads.
A deal for CSX would cost about $80 billion, assuming a price of about $41 a share, or 25% above where the stock traded when The Wall Street Journal reported Union Pacific and Norfolk Southern were discussing a potential merger earlier this month.
Berkshire might have to pay nearly 25 times earnings for CSX to protect its BNSF investment, but has over $330 billion in cash after selling more than $100 billion of Apple stock last year. The deal would add 8% to Berkshire’s 2026 earnings, UBS analyst Brian Meredith said.
What’s Next: Buffett will likely decide whether to pursue CSX with Greg Abel, the Berkshire executive who will become CEO at year-end, and BNSF’s management. Ossenbeck wrote that conviction is low among his industry contacts about BNSF’s next move. Neither Abel nor Berkshire could be reached.

—Andrew Bary and Janet H. Cho"